Articles & Updates

ALERT! – MO LIRC Affirms Award of Mesothelioma Benefits in a Case of First Impression

by James B. Kennedy

On January 31, 2017 the Missouri Labor and Industrial Relations Commission (“LIRC”) affirmed the Award of an Administrative Law Judge (“ALJ) in Casey v. E. J. Cody Co., a case involving the application of the “occupational diseases due to toxic exposure” amendments to the Missouri Workers’ Compensation Law, which became effective on January 1, 2014. The ALJ found that the employer’s insurer on the date that the employee’s mesothelioma was diagnosed was liable for the enhanced mesothelioma benefit, even though the employee was last employed by that employer, and last exposed to asbestos, in 1990.

{The ALJ’s Award was discussed in an alert posted to this website on April 11, 2016. Please refer to that here.}

In the Final Award, the LIRC affirmed the ALJ’s findings that:

  • The employee (now deceased) contracted mesothelioma, an occupational disease.
  • The mesothelioma arose out of and in the course of his employment.
  • The employee was last exposed to asbestos when he worked for Cody Co., his last employer.
  • The employer had notice of the occupational disease or was not prejudiced by any lack of notice.
  • The employee’s exposure to asbestos was the prevailing factor in causing the employee’s mesothelioma and resulting death.
  • The insurer’s mesothelioma endorsement applied to the Claim, since the date of diagnosis (October 26, 2014) was after January 1, 2014 and the disease was diagnosed during the policy period.
  • The mesothelioma endorsement superseded the policy language, which provides that in order for the policy to apply to an occupational disease, the exposure must take place during the policy period.
  • [The ALJ’s award was only modified to correct the rate of compensation utilized by the ALJ to calculate the enhanced benefit, the maximum rate of compensation in effect on the date of diagnosis for permanent total disability and death benefits (105% of the State Average Weekly Wage – “SAWW”), to 100% of the then SAWW - as required by Sec. 287.200.4.]

Although the LIRC generally approved and adopted the ALJ’s rulings on the coverage issue, they added some additional reasoning of their own:

  • The LIRC rejected the insurer’s argument that Sec. 287.063.2, the section which shifts all liability to the last employer in whose employment the employee was last exposed to the hazard of the disease at issue, should also then shift the liability to the last insurer for that last employer.
  • That argument was rejected since there isn’t sufficient legal authority to find that Sec. 287.063.2 applies equally to successive insurers as well as successive employers.
  • In addition, the LIRC pointed out that the historical insurer (here the insurer for the employer in 1990) could not have calculated and charged a premium to cover a risk that didn’t exist in the law when that insurer’s policy was written [but mesothelioma has been a recognized occupational disease for decades].
  • However, the current insurer wrote the policy, and added the mesothelioma endorsement, fully aware of the exposure that insurer was accepting and for which that insurer could collect an appropriate premium [really?].
  • The LIRC also questioned whether Sec. 287.063.2, given the current “rule of strict construction”, even applies to cases being pursued under Sec. 287.200.4 due to the lack of guidance in the latter section concerning the successive insurers issue.
  • Whereas the new law clearly applies to the insurer which added a mesothelioma endorsement after January 1, 2014.
  • Lastly, the LIRC emphasized that under Sec. 287.280 an insurer must insure the employer’s “entire liability” under the workers’ compensation law, ergo, including the liability now created by the new occupational disease provisions.

You need to know:

  • The LIRC’s decision is likely to be appealed.
  • The constitutionality issues which the defendants raised have not yet been addressed (since neither the ALJ nor the LIRC have the power to decide those issues).
  • Only the enhanced benefit is at issue (no “traditional” occupational disease benefits were being sought).
  • The date of diagnosis was after January 1, 2014 (in some cases which had been filed, only the Claim filing date is after January 1, 2014).
  • We don’t know to what extent this decision applies to claims for one of the other ten “occupational diseases due to toxic exposure”, those where neither an election nor an endorsement is required.

STAY TUNED!

Question or comments? If so, contact Jim Kennedy at jkennedy@evans-dixon.com, 314-552-4020 (Ph.) or 314-884-4420 (Fax).

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